The Low Income Housing Tax Credit (LIHTC) program creates more than $8 billion per year to develop and rehabilitate affordable housing units. According to the United States Department of Housing and Urban Development, LIHTC is the most important resource for creating affordable housing in the United States today. More than 2.7 million affordable housing units have been developed over the past 30 years though LIHTC. However, there is uncertainty about the continued success of the program. Potential changes to income tax law are delaying affordable housing projects currently in development, and projects in the planning phase are suddenly challenged with budget shortfalls. History of LIHTC The LIHTC program was signed into law in 1987 and is monitored by the Internal Revenue Service. Housing finance agencies in all 50 states oversee the daily administration of the program. LIHTC differs from the approach the federal government takes towards other housing programs. Instead of using federal funds to build and manage housing resources across the county, the LIHTC program gives states, investors, and affordable housing advocates the ability to plan, finance and build projects that best fit their local needs. Nonprofit housing developers acquire tax credits from their state housing finance agencies based on a competitive process. States award credits to projects they deem most valuable based on pre-defined criteria. Awarded non-profits then turn around and sell tax credits to private investors such as banks and corporations. Those investors save on their annual tax bill and nonprofits raise capital to build housing. It’s a win-win for all. Future Uncertainty Because the sale of tax credits is a bidding process, prices are based on the need for investors to reduce their tax burden. If that need is reduced through tax reform, then there is less competition for tax...